What's incarceration to loss of reputation?

• Position: Triangle

When accused of a crime you didn't do, why is being suspended from a prestigious university worth more in damages than rotting in prison? Because, in the first case, you're settling with a private-sector target with deep pockets. A recent Internal Revenue Service tax lien for $6.5 million suggests that Duke University paid Reade Seligmann, one of the lacrosse players wrongly charged with raping a stripper (cover story, January 2008), a settlement between $15 million and $20 million in 2007. If the other three players that were suspended got the same, the school paid between $45 million and $60 million to make the problem go away.

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That's a lot more than you'll get for being unjustly imprisoned, which is generally restricted by statute to $50,000 a year, for a maximum of 15 years--$750,000 tops. In February 2010, the North Carolina Center on Actual Innocence in Durham, which represents those wrongfully convicted, obtained the freedom of Gregory Taylor, a Cary man who spent 17 years in prison for a murder he didn't commit. "That meant he spent the last two years in prison for free," Executive Director Christine Mumma says.

Factors other than fairness play a part. For one thing, prosecutors and judges can't be sued for putting the wrong person behind bars, says James Coleman, a Duke law professor and national expert on wrongful convictions. Corporations hold no such immunity. That gives more bargaining power to potential plaintiffs and boosts pressure for a private enterprise such as Duke to settle, rather than suffer the costs and public-relations consequences of a long legal fight.

The state can be sued for wrongful incarceration, but anyone who accepts the standard settlement waives that right. Those who choose to sue usually must prove "egregious conduct on the part of the...